Please take a moment and make a financial contribution to TheFunded. If we have helped you, help us with resources to further grow the both the site and our entrepreneur training program, The Founder Institute.

Tech Coast Angels CERTIFIED

Suspicious Reviews Warning:
TheFunded.com algorithm or a Member has detected highly suspicious review activity by the following organization(s). In the majority of cases, the organization in question has pressured CEOs to write favorable remarks and contribute favorable ratings. Readers are advised to interpret the reviews with caution. This warning will expire on April 15, 2011.

Firm Rating:

Rated 2.1 / 5.0 by 31

TrackRecord

2.1

OperatingCompetence

2.1

PitchingEfficiency

2.0

FavorableDeal Terms

2.2

ExecutionAssistance

2.0

Firm Homepage:

FIRM OVERVIEW: Small Angels founded in 1997 based out of Los Angels, USA (US West)

FIRM DESCRIPTION: Tech Coast Angels, www.techcoastangels.com, is the largest angel investor group in the United States. Its members provide funding and guidance to more early-stage, high-growth companies in Southern California than any other investment group. TCA members invest in companies in a wide range of industries, including the life sciences, biotech, IT, services, retail, Internet, financial, software, media, consumer products and tech startups. TCA members give companies more than just capital; they also provide counsel, mentoring and access to an extensive network of potential investors, customers, strategic partners and management talent. TCA has more than 250 members, including its venture capital affiliates, in five networks in Los Angeles, Orange County, San Diego, Westlake/Santa Barbara and the Inland Empire.

Posted by
taurus
on 2008-05-16

PUBLIC:

Per, "They are legitimate, serious investors who have invested tens of millions of bucks in hundreds of companies, and do what they do because they want to, not because they have to.. The investments they make are ones that VCs simply are not ready to do. "

Over what number of years have they made these hundreds of investments"

Whoever made this overtly positive TCA post sounds like they are closely associated with TCA. Which BTW would be no surprise.

TCA is a social club of part time investors. Only a small handful are active, and your "lead" needs to lobby members to invest because only if you get a critical mass of interest do you get funding. So it is critical you get a strong lead person, and understand this is more about a popularity contest among members vs an investment in big ideas like you'd get with a VC lead who is the decision maker on funding your deal. Given the number deals they did last year, you might want to buy a lotto ticket instead of wasting your time and energy.

I only dealt with the LA/OC chapter. If you have a tech oriented or web oriented play, it will be difficult for them to grasp. The process is rigid, inflexible, and unforgiving. You are at the mercy of the lowest common denominator. Risk adverse, they want to see traction in a business before they will put $$$ in.

Posted by
Aspian
on 2007-08-09

PUBLIC:

The term "Tech" needs to be removed from their name, as few in their group have an understanding or grasp of technology or technology trends. Their 1-minute pitch sessions are a humiliating abuse of their power in the Southern California area. I'm waiting for the clown suit competition, which would at least be anonymous.

Posted by
MikeGlanz
on 2008-03-04

PUBLIC:

I was warned prior to seeing TCA that they were slow movers, but a friend recommended them to me so I gave it a shot...

I pitched and was shot down - but with enthusiasm, saying they wanted to see another couple months growth... I came back above and beyond what they asked for... and their response was "come back with another couple months growth"....

Posted by
David Saad
on 2007-11-19

PUBLIC:

Let me start with a disclaimer: My company called Clupedia is a portfolio company of Tech Coast Angels. In fact, we raised one of the largest, if not the largest round in TCA's history. I also won the Most Promising Investment Award during the 2006 Fast Pitch competition.

In response to other postings, here's my take on TCA, their process, their people, and their Fast Pitch competition. I shall be as objective as possible by listing the pros and cons to benefit future entrepreneurs as well as give feedback to TCA's executives who might be peeking in.

Pros:
They do fund. In fact, they are the largest network of angels on all fronts - numbers of angels in their network, number of deals they made, the total amount of investments made, number of companies in their portfolio which attracted VC funding, etc. From that perspective, their track record is very respectable.

They do enjoy a good reputation among the VC community. Many of the local VCs sponsor their event. In fact, almost all local VCs treat TCA as an excellent source of deals. For VCs, TCA is really nothing but a screening process. Thus, any company that gets funded by TCA and does well, is likely to attract VC funding. Therefore, TCA is essentially doing the early due diligence work for VCs, and VCs like that.

They do have some smart, experienced, and well-connected angels that can make critical contributions to a start-up. More than just the money that they bring to the table, they can give you great advices, recruit executives, attract customers, establish strategic alliances, and open doors with VCs.

Even though their process is long and rigorous, it does indeed weed out weak companies that are not quite ready for angel investment. In fact, I know of at least three local companies who got turned down but benefited from the process by getting great advices, references, referrals, etc. So essentially, if they like you, but not enough to invest in you, they will still help you by getting you more ready to pitch again. Therefore, if you have a good attitude, open minded, listen to their feedback, there is a good chance that you will get a lot out of them, for FREE, even though you don't get funded. Therefore, you have everything to gain and not much to loose, other than your time which is very understandably valuable, to pitch to them.

Cons:
Angels at TCA come from many different backgrounds. Chances are that the majority of the people listening to your pitch won't really understand your business. They typically rely on few of their peers who do. Thus, there is a "herding" effect that takes place. The key to your success at raising funding at TCA is to have one of the influencers who knows your space become your evangelist. Without that influencer, your chances to raise any money are very slim. As a result, you need to think about TCA as a network to be lobbied, and your sales strategy in terms of raising the funding, is actually to work the network. You must start by discovering the influencers, work them, and get them to spread their influence on others to gather as many signatures as possible. There is a tipping point. Once you reach that tipping point, you start to see other investors signing up, just because others did.

Micromanagement can be a major issue that can lead to your failure if you do not watch out. Typically, the board of directors of a startup is far more involved in the operation of the company compared to a later stage company where the board restricts itself to monitoring and just strategic matters. Furthermore, angels tend to want to get involved more so than VCs. They are passionate about your company. The problem is that if they get too passionate, then they start to want to run your company. That's when the problems start. What distinguishes the men from the boys as entrepreneurs, a good entrepreneur needs to find a good balance between embracing the involvement of board members yet at the same time keep an arm-length as far as operational issues. In essence, once your board starts to get involved in the operation of your company, you will likely end up on a very slippery slop. The fact is that everybody has an opinion, but since you're the one who is running the company and since the buck stops at your desk, your opinion is what counts. On the other hand, if you take the attitude that you know it all and ignore some of their advices, chances are that you will be wrong at one point or another, and when you're wrong, you won't get the support of your board. That could be the kiss of death, unless you have prepared for an alternative.

Fast Pitch
At first I was skeptical. I also agree with one of the users who made a comment about the fact that there are some clowns who pitch. Very true. On the other hand, those clowns are weeded out during coaching sessions. The 12 companies who get selected to compete in the event are good companies. Of course, that doesn't mean that they are fundable. Nonetheless, the event does give you exposure, it does force you to articulate your thoughts about your company, and it does help you manage the butter fly effect. So, jump in and compete. There are those who dream about it, those who talk about it, those who complain about it, those who do it, and those who win it. Which one are you"!!! It's up to you.

My Advice
If you have a venture that could bring 5 to 10 times returns within 3 to 5 years, you should pitch to TCA. Follow religiously their process even if you don't like it, do your homework, and work the network as explained above. As far as your attitude is concerned, you need to demonstrate leadership and be assertive, yet at the same time be open minded and a good listener. It's a balance that you must strike. In addition, diplomacy is the order of the day. You can bet that you will have disagreements with them. You can also bet that there will be different opinions and politics will start to crawl in. Be passionate, listen, yet follow your intuition. When you reject an advice, do it diplomatically. Your job would be to maintain order and consensus. However, that is much easier said than done. On the other hand, nobody said that startups are easy. It comes with the territory. So if you can't take the heat, don't even bother to enter the kitchen.

Overall Score
My opinion might be bias because my company is a poster child of TCA. We had a very good experience with them. On the other hand, I must admit that I also had my issues with them, especially after the funding. So, I think I am being very fair and objective. I give them a 4.5 out of 5 and I encourage every entrepreneur to consider them. And that's my 2 cents.

If you are in the startup business and don't care about product, creating value, or your company achieving long term goals, TCA is right for you. First they only invest in ideas so that are so safe because they have been de-risked by several other companies doing the same thing who were successful years ago. Meaning they will encourage you to sell your company by flipping it to a competitor in about three to five years.

They want as much of your company as they can get to cover their asses in heavy dilution that will not occur. Do not fall for their game. They don't do due diligence even though they say they do. All there decision are based on people who are related to them or know nothing about your industry. You are better off going up to Silicon Valley and finding someone who believes in you.

In short if you want to change the world look elsewhere, if you want to be a millionaire and will do anything to become one (including selling your soul, your company, and your dignity), these guys will be your best friend.

Posted by
lbc
on 2008-04-09

2) pre-screen: 15min pitch to handful over phone
- if this group likes it, you'll be scheduled for #3 within the month

3) screen: 15min pitch to subset (15-30) in person
- this is followed by 15min Q&A and (for LA and OC chapters) immediate feedback of approx level of interest
- you'll get list of actual interested members within a couple of days
- if interest is strong enough, you'll get invited to other chapters (by their respective screeners, who are always watching)

4) due diligence:
- occurs only if enough interest at #3 AND a lead steps up
- can be slow, perhaps 2-3 months, depends greatly on your lead

5) dinner meeting: to full membership
- you'll have some committed members but you probably need to rally a few more here

Posted by
Jen Sargent
on 2010-10-29

PUBLIC:

I had a very positive experience with TCA this spring. I came to them with a partially-filled round A that I needed to complete. I pitched to three of their five forums and within six weeks of the first pitch I closed the deal. Since then my company has received strong support from the group and our TCA board member specifically. They have an extremely strong and well-connected network in Southern California.

Posted by
Dean Rosenberg
on 2009-12-31

PUBLIC:

Tech Coast Angels led two rounds of funding for my company, AIRSIS, Inc. The process in both cases was fair, efficient, and in our case, resulted in $2M in funding at attractive terms ($1M in each of 2 rounds). I have read some of the negative reviews, and it seems like many come from entrepreneurs who may not have the right expectations of what an angel investment group is all about. Here are my 2 cents:

1. You have to go into the process realizing that you are not pitching to a VC fund - you are pitching to a group of angel investors who have been conveniently assembled to allow you to make a single pitch to 40+ accredited investors. Some of these investors can invest $500K+ in your deal. Most will likely invest $25K to $50K.

2. If you get the attention of a TCA member to lead your deal, he/she will do much of the heavy lifting to rally others into the deal. You will also have an opportunity to present in other regions. While this takes more time, you have the advantage that you have already been vetted by existing members. In both of my investment rounds, we received funding by members in San Diego, Orange County, LA, and Santa Barbara.

3. The closing and funding process was professionally handled (by a TCA-hired attorney), and the term sheet gave us a mechanism to bring our own non-TCA contacts into the deal, with these contacts knowing that terms were set in an arms-length manner (as opposed to friends-and-family deals).

4. Since our funding in '05 and '07, TCA investors have loaned my Company additional funds when we needed it (over $400K), and have provided strategic counsel and even access to customers, partners, and related business development. I have 30 TCA investors, and without exception all have been patient and entrepreneur-friendly. I have done my part in this by keeping all investors informed on the Company's progress through quarterly investor updates and annual audited financials.

The bottom line: It is extremely difficult to raise $500K to $2M from any source. It is usually too big for friends and family (or a single angel investor), and too small for VC. Thus, for my company (raising $2M), TCA was a VERY good fit.

If you have questions about my experiences with TCA, feel free to contact me at:

Posted by
SoCalNoCal
on 2007-09-19

PUBLIC:

TCA are a group of around 300 individual angel investors that share due diligence duties on a volunteer basis. I've spent a lot of time with them and I've never seen or heard of anything like what Aspian describes. With a group like that it really comes down to the individuals that are interested in your company. You need a strong lead and you are only going to get one if you really have it all together. It is not an easy place to raise money but it is a good group to be associated with.

Posted by
fcreede
on 2007-08-07

PUBLIC:

Many startup companies treat TCA as a funding source of last resort. If you are not ready for VC $ and have the time to invest in due diligence --which not easy, TCA is a good choice. If not, like any source of capital you have to choose where you pitch. I know of several TCA funded companies, even pre-revenue, heck they are on their website. I also have seen people who pitch ideas, have none of their own investment in the business and want someone else to fund the A-Z of the business. Don't think they will get $ anywhere.

We submitted our application on one day, were called in to pitch the next Friday. Pitch went very well and we got great feedback with the follow-up meeting scheduled for just over a week later. People in the pitch were very attentive and interested and provided excellent feedback.